Patent refusal orders lacking specific reasoning on inventive steps and technical contribution violate principles of natural justice.

Navya Network Inc. (the Petitioner) filed a PCT national phase patent application (No. 2068/MUMNP/2014) titled "Medical Research Retrieval Engine"

On May 27, 2024, the Respondent (Assistant Controller of Patents and Designs) refused the application on two grounds: (i) lack of inventive step under Section 2(1)(ja) of the Patents Act, 1970, citing prior art documents D1–D3; and (ii) non-patentability under Section 3(k) on the basis that the invention constituted a computer program per se and an algorithm

The Petitioner challenged this refusal under Section 117A, contending that the order was unreasoned, failed to apply the established five-step test for inventive step, and introduced new grounds under Section 3(k) ("self-learned ontology") that were never communicated in the initial hearing notice

1. Whether the Respondent's finding on lack of inventive step under Section 2(1)(ja) was sustainable in the absence of a detailed analysis of prior art and the five-step test

2. Whether the Respondent violated principles of natural justice by refusing the application on grounds not previously communicated to the Petitioner in the hearing notice

3. Whether the claimed invention, involving improved database retrieval efficiency, was excluded from patentability under Section 3(k)

The court primarily applied Section 2(1)(ja) (Inventive Step) and Section 3(k) (Computer programs per se) of the Patents Act, 1970

It relied on the five-step test for determining obviousness/inventive step as established in F. Hoffmann La Roche Ltd. v. Cipla Ltd. and reaffirmed in Tapas Chatterjee v. Assistant Controller of Patents and Designs

It further applied the principle from Auckland Uniservices Limited v. Assistant Controller of Patents and Designs that an order refusing a patent must be a speaking and reasoned order

Regarding Section 3(k), the court referenced Microsoft Technology Licensing, LLC v. Assistant Controller of Patents and Designs, which holds that inventions yielding a technical effect like improved system performance/efficiency are not excluded from patentability

The Court observed that the Respondent failed to follow the mandatory five-step test for assessing inventive step

The Impugned Order lacked a comparison between the Petitioner’s invention and the cited prior art (D1–D3) and failed to explain how a person skilled in the art would find the invention obvious based on those documents

The Court found a material departure from the hearing notice; the Respondent introduced a new objection regarding "self-learned ontology" in the final order, which deprived the Petitioner of a fair opportunity to respond, thereby violating natural justice

Regarding Section 3(k), the Court noted that the Respondent failed to specifically examine the Petitioner's claim that the invention produced a "technical effect" through improved database retrieval efficiency and reduced computational load—factors that could circumvent the Section 3(k) bar

The Court set aside the Order dated May 27, 2024, and remanded the matter for de novo consideration. The Respondent was directed to provide the Petitioner with a fresh hearing and pass a reasoned order in accordance with the law

The Petition was disposed of accordingly